Corporate India saw 3.7 pc revenue growth in FY24: ICRA

Chennai: Corporate India reported 3.7 per cent revenue growth in FY24. The softening of input costs helped 17.4 per cent growth in earnings. The aggregate revenues of 558 listed companies evaluated by ICRA expanded by 5 per cent during Q4 FY2024. Some of the consumer-oriented sectors like airlines, hotels, automotive, consumer goods, power and construction sectors have supported the growth.

These companies ended FY2024 with a 3.7 per cent increase in revenues. The revenue growth was curtailed to an extent by a general decline in realisation levels amid softening of raw materials costs for most sectors. Some of the raw materials that saw softening of prices include chemicals and fertilizers.

This softening of input costs along with operating leverage benefits helped the companies see an expansion in operating profit margin by 92 bps to 17.2 per cent in Q4 FY2024. For fiscal 2024, earnings expanded by 180 bps to 17.4 per cent. However, the OPM growth of 17.4 per cent in FY2024 is yet to reach the 19 per cent level witnessed during FY2022 as the input cost remained elevated over historic levels despite softening in recent months.

ICRA expects that corporate India’s revenue growth prospects will improve in the second half of FY25. India’s GDP is expected to grow by 6.8 per cent in FY2025 after 8.2 per cent in FY2024. While signs of revival in rural demand have emerged, headwinds such as a slowdown in Centre’s spending during elections and the monsoon period are likely to weigh down on growth in H1. Nevertheless, a pick-up in growth is likely in H2, owing to back-ended rise in Centre’s spending and private capex, as well as improvement in rural demand in case the monsoon is favourable.